Friday, December 31, 2010

Most of these were Breakfast Books – things I read over the first two cups of coffee while avoiding the internet. The balance were travel companions & things I read instead of sleeping. This is not all of them, just the one’s I felt comfortable admitting I’d read all the way through, underlining as I went.

Climate Wars: The Fight for Survival as the World Overheats. Gwynne Dyer. If you just read the scenarios up to 2035 or so - which are mostly probable - you should have trouble sleeping.

Dismantling the Empire, Chalmers Johnson. We need someone new to step up and replace the now departed Johnson, someone to relentlessly chip away at The Empire with truth and vision. And anger.

Econned, Yves Smith of Naked Capitalism. If you need a grounding in the alphabet soup of disastrous ideas that collapsed the empire, here's the thing.

Europe Between The Oceans, Barry Cunliffe. How migration and trade developed and influenced civilization on the European peninsula, 9000 BC to 1000 AD.

Griftopia, Matt Taibbi. The development of finance in the US as a criminal enterprise, from the local realtor's office to Wall Street and Washington.

Impending World Energy Mess (The), Hirsch, Bezdek, & Wendling. The first half you should already know: How we got here. Read the second half, which tries to work out where we go from here.

Monsoon, Robert D. Kaplan. Everything you didn't know about one-third of the world, then, now, and in the future.

Monster (The): How a How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America–and Spawned a Global Crisis. Michael W. Hudson.

Points for a Compass Rose, Evan S. Connell, Jr. When you get so angry you could... go read Connell's indictment of humanity and politicians. I re-read it every 2 or 3 years.

This Time Is Different, Reinhart & Rogoff. No, it isn't. It never is. A little math and chart heavy, but they are economists, after all.

Washington Rules - America’s Path to Permanent War, Bacevich. If you haven't read Bacevich, read this one, then go back and get the others.

Winner Take All, Hacker and Pierson. It's not just income equality, it's what those in the top 1% are doing to our democracy that is frightening.

World in 2050 (The): Four Forces Shaping Civilization's Northern Future, Laurence C. Smith. Assume 9 billion people, global warming of 2 to 4ºC, a sea level rise of 3 feet, and a world stripped of its resources by globalization. The future of our Planet of Slums.

Thursday, December 30, 2010

False Start: What a few delusionals see as bipartisanship was simply the exception that proves the rule: a pitched battle is about to begin in Washington, between the people and the money, between social decency and tax cuts. And the Golden Rule will rule – as in he who has the gold makes the rules. Or Goldman makes the rules. Something like that.

Book Club: Representative Paul Ryan (R-WI) makes his staffers read Atlas Shrugged and write a 10-page essay on which character Ryan most resembles.

More, More, More! US military commanders want to increase the number of secret special operations raids into Pakistan's tribal areas. Fellas, if you say you want more, it tacitly acknowledges you are currently conducting secret military operations within the borders of an allied nation. The least they could have done is wait for WikiLeaks.

Where's The Outrage? Except for two two-dimensional cartoon figures who speak in monotones and can't pronounce 'Bernanke', no one in the US seems upset that more than half of the Fed's bailout money went to foreigners. The Fed is the lender of last resort, no matter where the resort is located.

Not Applicable: Why is it that every time commodity prices rise it is the result of either speculative manipulation or the Fed inflating the money supply. Why can't it just once in a while be simply a matter of all those damned Chinese and Indians wanting to live like civilized people? Maybe somebody, outside the US, is doing better than the Wall Street dominated economy and is demanding more resources than are currently in the supply chain?

You Have to Ask? “Is This As Bad as the Great Depression?” Probably. Most assuredly the government has done more and spent more than during the Depression – and to less effect.

Recovery: Over half of unemployed job-seekers report being offered more than 25% less than they were making previously. A sizable number report losing $10,000 in starting pay for each year they've been unemployed. Companies agree this is true and say that they low-ball new employees “because they can.”

The Smart Money: Private investors are quite willing to buy long term US and UK bonds for about 4%. These investors know, or should know, that there is no way on god's little green earth that either government will be able to pay back these bonds and keep all their social promises. The governments will have to default on one or the other, and the investors believe it'll be the social commitments.

The 'Gimmie” Question: “Can We Run Out of Oil and Other Natural Resources?” No, we can always go to the store and buy more, can't we?

Blowout Preventer: Brazil says it will replace troublesome oil drilling platforms with “underwater cities” on the seabed where workers can stay for months. And they said the easy oil was all gone.

Wednesday, December 29, 2010

Gossip: Christmas retail sales increased the most in 5 years. So they say. Let's wait for the final report card – profits - before we break out the bubbly.

Perspective: Prices for copper, cotton, wheat, corn... and oil are all up at the commodity exchanges and soon will be in the stores. Many in the US are already on the “speculators are driving up the prices” bandwagon, especially about oil. Nasty inflation due to Bernanke's QE2 is also suspected. What the blinkered US commentariat does not see is that parts of the rest of the world are actually growing and expanding their consumption. It may well be just supply and demand, it's just not us doing the demanding.

Predictions: I just can't help myself. I know that most predictions are about as reliable as New Year's resolutions but I keep reading them. Zero Hedge's listing came as close to my views as I've seen.

Untouched by Human Hands: Dow Jones' Lexicon service sends real-time financial news, in digital form, to... the financial computers which make 70% of the trades on Wall Street. They trade on such a massive scale that a couple of pennies on a trade can make or lose fortunes. As HAL said, “I know I've made some very poor decisions recently, but I can give you my complete assurance...”

Reforming Reform: The incoming Republicans in the House intend to castrate the Dodd-Frank financial reform law by strangling the SEC and Commodity Futures Trading Commission via skimpy budgets, and by dragging their senior people in front of continuous GOP run hearings to harangue and belittle them. Representing the American public their masters' voice once again.

The Good News Isn't Very Good: There seems to be a slight increase in employment, but it is wholly low skill low pay temporary jobs at one end and highly technical highly paid at the other and nothing for the middle class. Yet companies are sitting on large piles of cash – because they can't figure out anything worthwhile to do with the money.

It's Only Make Believe: Homeland Secretary Napolitano says it is immaterial that the TSA's x-ray scanners don't detect bombs and that the TSA's screeners fail to spot guns and other weapons 70% of the time, because even if they don't work they make us feel safe and may scare the bad guys away.

Hints: House prices continue to decline according to the S&P/Case-Shiller indices, falling 1.3% m/m in October. Single-family houses fell at twice the expected rate. The double dip in home prices is now in its fifth month.

Strange Bedfellows: The right, which usually sees the government as the villain, now wants states to have the right to declare bankruptcy and default on their payments to bondholders. Of course their goal is not the losses to the bondholdrs (who will turn out to mostly be pension funds – the middle class), but to enable “restructuring contracts” and thus force government workers, police, firemen, etc. to accept vastly lower wages and benefits. But the big prize is letting/forcing states to privatize everything. Roads, water systems, parks... Look at it this way, if Grover Norquist is for it, it cannot be good for the great majority of us.

Second Look: The Dallas Fed's Texas Manufacturing Index was, despite some boosterish headlines, pretty much a downer. The index came in at 12.8 instead of the expected 17, which was a slight drop from November's 13.1. Worse, inventories surged, raw materials prices increased and wages and benefits grew, but new order volume dropped. In other words, they paid a bit more to make stuff out of more expensive materials, just to pile it up in inventory as orders dropped. Encouraging.

Go To Your Room: The question was “”Does Unemployment Lead to Less Healthy Diets?” And the answer is “You obviously have never been unemployed.”

Exports Count: Economist and former deputy interior minister Saeed Laylaz predicts that in 5 or 10 years Iran will have no oil to export. Iran's main source of hard currency is the export of oil. Patience is a virtue.

What, Me Worry? Looking at the forecasts for 2011 is scary; not one pundit in a dozen sees any chance of the markets crashing. Brokerage houses and administration economists keep raising their estimates for GDP growth. Worse, most investors describe themselves as bullish. They've got the 'bull' part right.

Con Job: Get that education! Just don't take any of the basic math courses because you don't want to figure out how much it will cost to repay the loans, or how long it will take, or figure out that you are one of that 50% of college graduates who are embarking on careers as baristas.

Oh Say Can You RTC? Remember the Savings and Loan fiasco? Remember how the Resolution Trust Company closed the S&L's fired all the managers and jailed many of them, wiped out all the stockholders, sold off the good stuff and bundled up the crapola and so on? Why not do it again?

Competition: In 2010 China launched 15 satellites into orbit, the first time any country put up more satellites than the US. Space, the final frontier.

This Is A Joke, Right? Cornell's tech-heads are building a 'food printer'. You punch in the recipe, adjust the flavors, add the raw materials (chemicals of some sort?) and it “prints” out a product that has the taste, texture, nutrition etc. of real food. Sort of like a microwave you only take stuff out of.

12 Step Program: In the US 42 million are on food stamps, one out of three families – 45 million people, 22 million children - is “low income”, the number of the working poor continues to increase, over half of the US labor force have suffered unemployment, a cut in pay, reduced work hours, or have become involuntary part-timers since December 2007. The first step to recovery is admitting you have a problem. We, the people, have a problem.

Monday, December 27, 2010

Place Your Bets... Kuwait says that the global economy will remain well supplied with oil even though the price reaches $100 a barrel. True. At $100 a barrel there will be oil for anyone who can afford to pay $100 a barrel. After that's gone, they've got some $125 a barrel.

Running Hot and Cold: That warmer climate can result in colder weather works like this: The warmer Arctic melts the sea ice. The ice used to reflect the sun's rays back out of the atmosphere but the darker seas just absorb the warmth. The warmer seaswarm the air, the air rises and disrupts the normal winter air flow patterns pushing the colder air inconveniently south.

Numbers Game: In 2010 the US added 937,000 non-farm jobs. Foxconn, the Chinese tech firm that makes iPads, added 300,000 jobs. In the US, 9.8% of workers are unemployed. Only 9.3% of the work force are employed in manufacturing. We could double our manufacturing base overnight and still have unemployed workers.

Priorities: China, which has invested $100 billion in water projects in the last 5 years, will spend another $30 billion on water conservation projects in 2011. The US has invested over $1 trillion in the war in Iraq and nearly that much in Afghanistan. Of course we've been at it for nearly 10 years.

Rose colored glasses: Two degrees Centigrade. Maybe 4, at most. That's the story we usually get fed by the climate scientists. But in the past a doubling of CO2 has had much stronger effects and there is no reason that the current warming couldn't end up 18 or 20 degrees hotter in a couple of hundred years.

Fear Factor: A few years back the banks were allowed to enter the twilight zone and leave mark-to-market behind and adventure into mark-to-wishful thinking on the theory that there was no reason to set aside reserves for losses they would not be taking, because the worthless assets would be transmuted into full value as soon as the recovery occurred. The recovery has been indefinitely delayed. Is there a time limit on the voluntary suspension of disbelief?

Barreling Ahead: Gasoline across the US has topped $3 a gallon. Oil has passed $90 a barrel. They told us this would happen as the economy recovered. But the price has kept rising and the economy has not recovered and none of this going according to the playbook.

The Won't of the People: The victorious Republicans said they would follow “the people's priorities" in Washington. Sure enough, except for tax cuts, ending Don't Ask Don't Tell, ratifying the START treaty, and passing the DREAM act. But Boehner did say that this would start “beginning January 5th...” And not a minute sooner.

Soros About That: George Soros points out that the two predominant economic theories – the rational expectations approach and the efficient market mythology – are seriously flawed because markets are neither rational nor efficient. Markets - and thus economies - result from human beings wandering around being human – greedy, capricious, fearful, strongly independent or slavishly conforming. So he's funding an institute to at least recognize the imperfectablity of mankind.

Payment Due:This blog is presented free of charge about 300 times a year, but now I'd like something in return. I would like each of you to donate $10 to the nearest Food Bank. While you're there, volunteer to work in the kitchen. If you can't find the food bank, put ten bucks in the kettle the next time you pass one. And I thank you.

Friday, December 24, 2010

If you can't afford oil at $90 a barrel, you won't be able to afford it when it gets back to $20 a barrel either.

Slow learners: The Irish government, driven to penury when it assumed the obligations of the country's three largest banks, has cleverly stepped forward to take control of Allied Irish Bank.

Clarification: Halliburton says that it paid $35 million in bribes to the Nigerian government to get them to drop the indictment against Dick Cheney “for making improper payments to government officials in Nigeria”.

A Public Education: Over 45% of the federal loans given to students at for-profit colleges in 2008 will go into default. There is no reason to expect the classes of 2009, 2010 and on and on will be any different. At least 75 % and as much as 90% of the funding at for-profit schools comes directly from these government loans. Taxpayers should think of it as a learning experience.

Decline: In the UK, mortgage lending amounted to just £6 billion this year, down from a £110 billion-a-year peak in 2006.

Three Steps Down: [1] International investors are becoming net sellers of sovereign debt. [2] Credit rating agencies are beginning to tell the truth about the soundness of various country's sovereign debt. [3] The pressure on governments to cut spending continues to rise. The result will be increasing austerity, increasing recession and wild fluctuations in commodities. In other words, more of the same.

Coming Detractions: Yields are rising again on Irish and Greek bonds – back to the levels they reached before the crisis was contained. Gets around, that word 'contained', doesn't it.

State's Wrong: Texas, blissfully unaware that the question of States Rights has been settled 46 times before – each time in favor of the feds, has refused to recognize the EPA's right to regulate carbon emissions. So instead of letting the state implement its regulations, the EPA will directly step in and take control.

Quoted: “I think we need a law that explicitly makes it legal for people to record government officials when they are interacting with them in their official capacity. And this is doubly true for police officers and other law enforcement officials.”

Future Present:Saudi Aramco's LPG exports will fall 24% in 2011 as domestic demand increases. Wait until they've traded all the camels in for cars.

House Rules: The incoming GOP House rules will demand that all spending increases get offset by cuts elsewhere and not by tax increases (tax reductions would not have to be offset, of course). Thus no stimulus effect. They also plan to split the debt limit vote and the budget resolution, giving them two hostages early next spring.

Hard To Argue With: Our economies run on credit, it's their lifeblood. Take it away, and they will stop running.

Department of Duh? Dean Baker loudly observes that “Giving tax breaks to the rich will add to the deficit!” Yes, giving tax breaks will add to the deficit. Doesn't matter who they are given to. It both is and is not a scandal, but it is not news.

A Christmas Present: This is a wonderful animated presentation on the Crisis of Capitalism, short and to the point, and from a point of view not usually encountered. [I tried embedding it here, but it ran too slow...]

Payment Due: This daily effort is presented free of charge. But in the modern Christmas spirit, I'd now like something in return. I would like each of you to donate $10 to the nearest Food Bank. While you're there, volunteer to work in the kitchen. If you can't find the food bank, put ten bucks in the kettle the next time you pass one. And I thank you.

Thursday, December 23, 2010

Neither/Nor: The Continuing Resolution, which funds the government through early March, is a continuation of last year's funding and does not include money to implement laws passed this year. Like health care reform. And financial regulation. Talk about starving the beast.

Comeuppance: All 51 of the Senate's returning Democrats want to change the Senate's approach to filibusters, restoring the basic idea of “the majority rules”. The Republicans rode a good thing into the ground.

Later Than You Think: Remember the booming holiday shopping extravaganza that the Usual Suspects were predicting back when there were still turkey leftovers? There may be a lot of shopping and even some buying going on, but very little of it at 'retail'. Do you know a store that hasn't run its after-Christmas sales yet? When the 30% Off! signs are up before Christmas don't you wonder how much better the deal will be next week?

Competition: The Obama administration, upon learning that S. Claus was also monitoring the behavior of US citizens without a warrant, has issued a heightened security warning for the holiday season. Citizens are urged to be especially vigilant around the entrance to stores and malls where unidentified individuals in deceptive costumes have been sighted.

Ouch: A judge has ruled that MBIA can use statistical sampling to demonstrate that Bank of America fraudulently sought insurance for $21 billion of MBS. The bank had insisted MBIA had to show that each of the 368,000 mortgages involved were fraudulent. The results will be the same, but justice may arrive quicker. The line is now forming to be next to take on BofA.

Chain Reaction: Folks simply stopped refinancing their houses (down 25% from last week) as interest rates climbed, making it six weeks in a row of declines. Mortgage applications (of all sorts) were down 18.6%, and the inventory of existing houses for sale increased 5.4% y/y.

Cures: The libertarian stuff sometimes sounds good, especially if I'm particularly upset with the clowns in Washington. The problem is that a little examination goes a long ways towards making most of it look like hollow posturing.

Exit Line: Senator Arlen Specter used his farewell speech to urge some future Congress to do something he never had the guts to try - “to stop the Supreme Court from further eroding the constitutional mandate of separation of powers."

Supply and Demand: If your income depends on getting mortgages in order to sell homes and the market is dead and mortgage rates are rising, what are the chances you might give in to the temptation to fudge a bit on the buyer's qualifications? Pretty good, apparently.

Interest-ing: US bond funds had $8.62 billion in net withdrawals this week, up from only $1.66 billion the previous week. The last time withdrawals were this high was in October 2008 – the last time everything came unhinged.

Political Debts: What happens when California, Illinois and any number of other states finally have to admit that the numbers simply do not work? They, and their creditors, will look to Washington. And with the Party of No sitting on the Federal wallet, there's little hope for much help there, especially when the results of letting the states dangle will be massive employment cuts, draconian cuts in social welfare, the decimation of public employee unions, vast reductions in social services – the entire Republican platform. And even with all that misery there's little hope that any effective long term solution will be found. Or is findable.

Wednesday, December 22, 2010

Pay To Play: The FCC has come up with new rules for 'net-neutrality' that essentially redefines 'neutrality' and make a fine (and costly) distinction between what is and is not 'the net'. Details will be in your next billing statement. It's like that sign in Animal Farm when it gets down to “Some animals are more equal...”

Been There, Done That: "Senior American military commanders in Afghanistan are pushing for an expanded campaign of Special Operations ground raids across the border into Pakistan’s tribal areas.” (NY Times) "The NATO force in Afghanistan denied Tuesday that the U.S. military intends to carry out ground raids inside Pakistan.” (LA Times) As a young soldier I remember standing on an LZ far inside Cambodia listening to a US Army LTC explain to me that we were not in Cambodia because the US had no troops in Cambodia.

Another 800 Pounder: Lagging along about three years behind the crash in housing prices is a corresponding decline in property taxes – you know, the taxes that cities rely on to provide services, pay for capital projects and educate the kids. Hold your breath, the worst shortages are still a year and a half away.

Having A Fine Time: Deutsche Bank has agreed to pay a $553 million fine. Jeesh. Half a billion bucks, for “various tax-oriented transactions”. Well, that explains everything. Meanwhile, Ernst and Young have been sued for “helping to hide financial risks” at Lehmans just before Lehmans disappeared. I think we're talking tax evasion and accounting fraud, but maybe it was just the petty cash.

Goose/Gander: Senate Republicans, lead by Tom Coburn of Oklahoma, plan to block legislation that would provide additional aid to cover the health care costs of 9/11 first responders at a cost of $7.8 billion unless there are off-setting budget reductions elsewhere. You know, like they did with the $780 billion in tax cuts for the very rich.

Eating the Cake? How is it that deleveraging Americans suffering 10% unemployment are spending enough to make retailers happy?

Apple Pie: Now it is Attorney General Eric Holder's turn to shout “Be afraid, be afraid!” He particularly wants us to understand that “the terrorists only have to be successful once” and that “the threat is real, the threat is different, the threat is constant.” Holder fears an “alarming rise in the number of Americans who are more than willing to attack and kill their fellow citizens,” as evidenced by the 50 citizens who have been indicted on terrorist-related charges in the last two years, especially those few who were not set up by the government. Be especially watchful around salad bars.

Unicorns: “The American Economy” does not exist. There are, instead, several distinct economies within the United States. Some, like that of the Wall Street financiers, are doing well. Most of rest are not, and have not been doing well for years, even decades. It may be a good time to be rich, as Business Week observed, but it is a very bad time to be anything else. e decades-long destruction of the American middle class is nearly complete.

Next Year In Jerusalem Mecca: Kentucky's tourism board has approved up to $37 million in state funding for a Biblical creationist theme park. Next year they will consider funding The Haj Experience theme park in Eastern Kentucky, replete with camels and flying carpets.

Tuesday, December 21, 2010

I wonder how Ben Bernanke feels about being the last Chairman of the Federal Reserve? Michael Panzner.

Walking the Walk: The experts at Merrill Lynch say that the great deleveraging is pretty much just the great walking away from a trillion dollars in underwater mortgages. The ongoing collapse in home prices – down 28% from the peak so far – has swallowed up the asset value that once underpinned consumer debt. A modest portion of the national deleveraging will come from “less consumption.” But first we’ll spend what once was the mortgage payment.

Sure Thing: After reading a bunch of forecasts for the coming year, it appears that companies that make anti-depressants may have a growing market.

Trail Balloon's Trial Balloon: Some Washington insiders are floating the idea that Mr. O is thinking about considering the possibility of proposing some Social Security cuts in his state of the Whole Damned Mess in January. The general idea seems to be that if he cuts our throats it won't hurt as much as letting a bunch of Republicans do it in February.

No Argument: 'The Unskilled Can Always Become Economists.' Wish I'd said that.

Roundup Ready: The Federal government is using Homeland Security, the FBI, state and local police, the credit card processors, Google, Facebook and probably those two beagles down the street to collect information (let's not dignify it with the word 'intelligence') on each and every citizen. The goal? Right, our safety. To protect our freedoms…

Weakly Allowance: In 2015 our current $14 trillion national debt will morph into $24.5 trillion – about $80,000 per capita. But if it's in 30 year Treasuries, that's a more manageable $2,500 a year. Just $50 bucks a week. Each. Assuming we've a balanced budget by then. And you know what they say about 'assume', right?

Simple: The United States is broke because of the unions and defense spending. See, I told you it wasn't Medicare or Social Security, and certainly not the free ride the rich and corporations get.

True Story: Jesus was a liberal. A progressive. A socialist. But that was before John Calvin and the Capitalists converted Him. And why are there so many little reminders of Homeless Palestinians on front lawns these days?

Real Tale about Spending: The BLS reports there are 15 million unemployed Americans, 12 million more who are 'underemployed' and a couple of million who have just given up looking. But never fear, advertisers and retailers will do their best (which is pretty damned impressive) to guilt trip millions of people to go even further into debt in search of our Christmas mirage.

Search Me:Being a graduate student who hopes to work at the South Pole under a State Department contract once I finish my internship with Stars and Stripes, I have no intention of reading any of those nasty WikiLeaks cables. But you, on the other hand, go right ahead.

Nutshell: ‘2010 Was The Most Business Friendly Year In Washington Ever’.

Monday, December 20, 2010

Extrapolate: Lloyds has written off 54% of its £26.7bn portfolio of its Irish loans – including expected 90% losses on commercial real estate. Roll that out and it translates into huge write-offs for banks across the Continent and in the US. Carry it forward to Greece, Portugal, Spain, Belgium...

Data Point: 64% of America's jobless have been out of work since before Christmas 2009.

Bond holders versus the populace: Remember that social unrest isn't supposed to happen in the Western world anymore. But as banks continue to shift their losses onto the populace, perhaps the winter of our discontent is at hand.

Rehabilitation: “I don’t think Obama is abandoning his principles for political advantage; these are his principles.”

Wonderland: Now the Pentagon has banned reporters for Stars and Stripes from reading the WikiLeaks cables. First it was grad students that were told not to read 'em, then employees at State, then the troops, then even scientists at the South Pole, while the Air Force has forbidden access to the websites of newspapers that have published WikiLeaks material. This bunch can’t even do censorship right.

Not in My Neighborhood: If you want to cut Medicaid, not extend it, tell me what you suggest we do instead. Nothing? Good luck with that.

Big Wow: The headline reads “Financial Interests Dictate Sovereign Policy.” [The title now reads “Greed is Not Good”, which also strikes me as not an earth shattering revelation.] I didn't think I needed to read the article itself, but the bit about “starving the slaves” seemed pretty good. I rather think they are burning down the barn to warm the horses...

Before Sunset: In Washington, where it still seems to be September 30th, the House of Representatives voted on Friday to extend last year's budget for three days. Three days. A new budget was due Oct. 1, but the GOP just said no. That's because the Republicans want to wait until they control the House and can begin their pruning of wasteful spending on health care, the elderly, education, the EPA and the rest of those socialist programs.

Just Wondering... If the UK can “block all porn” on the internet, why is the US letting the proletariat access to WikiLeaks?

Clean Sweep: The votes are in and it was not even close – the Republican's win Lie of the Year for depicting the health care reform act as being “a government takeover of health care.” Which it was not. It was the government forcing citizens to give their money to the insurance industry, which continues to control health care in the United States. But the Republicans “didn't let facts get in the way..”

Stuffing: Between Thanksgiving and New Year's, Americans manage to throw out 25% more trash than normal, not counting the stuff they get from their mothers-in-law.

Oily Math: Crude oil production peaked at 73 mbd in 2005 (EIA). Next year we'll use 88.8 mbd (IEA). Is Santa going to bring the extra 15 mbd? Nah, it's just that not all oil is oil. There's crude, condensate, natural gas liquids, that stuff they mine in Canada, ethanol and some 2.2 mbd that just magically appears at refineries.

Whether Report: Vice President Biden pledges that all US troops would be out of Afghanistan by 2014, "come hell or high water." Looks like rain to me.

Yesterday: Federal funding for the Temporary Assistance For Needy Families (TANF) program has ended, leaving the states with 15% less money fund the main lifeline for families and workers who have exhausted their unemployment benefits. No room at the Inn, indeed.

Exercise for Extra Credit: Gather 10 friends.

Do you know which one has been unemployed for over a year?

Of the remaining 9, which one is trying to support a family with a part time job?

Saturday, December 18, 2010

Snakes on a Plane: Congress took another step towards the far right's dream of endless low taxes, slashing the government's income and eradicating health care for the masses – through passage of the “Airport and Airway Extension Act.” The Democrats get a chance to repeal Don't Ask, Don't Tell, swear in a couple of new judges, and may get to approve the new START treaty. In return, the Republicans get to gut next year's budget.

Quoted: "The only practical effect of adding $858 billion to the deficit will be to put more pressure on Democrats to reduce non-defense spending of all sorts, including Social Security and Medicare, as well as education and infrastructure. It is nothing short of Ronald Reagan’s 'starve the beast' strategy." Robert Reich.

There's Something Happening Here... The Obama presidency gets worse by the day. Its affinity for Bush-era totalitarianism seems unquenchable. The wars go on – and the lies about progress are flimsier than those made during Vietnam. Guantanamo is still open – awaiting Julian Assange. Bradley Manning has been disappeared. Obama maintains he can do the same to any one of us – or simply kill us if we are out of the country. Freedom of the press seems on its way to being a memory. And Obama was the good guy.

A Rose... Despite repeated refutation by reality, Republicans cling to the rubric that tax cuts will cure all evils and that deficits do not matter. Never mind that there is lots of evidence to the contrary, they just keep repeating the mantra. But to no effect in the real world, where repeating a lie does not change it into truth.

Planning to Plan: The U.S. no longer has a permanent tax code. Every major tax Americans pay - income taxes, taxes on capital gains, interest and dividends, the Social Security tax and others - is now a temporary measure subject to revision or abolishment by Congress in a year or two.

Yclept: Bloomberg was correct in proclaiming 'It’s a Great Time to Be Rich,' pointing out that taxes on incomes and investments remain at historic lows and fortunes can be passed on at the lowest rates in a lifetime.

Essay Assignment: In a few well chosen words describe what it feels like to be in your 98th week of unemployment just before Christmas. Then describe what it will be like when three, six, and eventually fifteen million long-term unemployed Americans no longer have any income at all except food stamps. Explain how you explain to them that there's nothing more we can do. Explain to their children why it was more important to give the rich even more money while ignoring the plight of the economy's casualties. Describe how the budget-cutting, tax cutting Republicans will mitigate the pain and suffering of the long term unemployed.

Friday, December 17, 2010

Day Late, Not a Dollar Short: Goldman Sachs executives are set to collect $111 million in delayed 2007 and 2009 bonuses they earned by bringing down the economy and forcing the taxpayers to bail them out.

Hearts & Mines: After completing work on the Army's Counterinsurgency manual, General David Petraeus went to Afghanistan to win hearts and minds. Which doesn't explain why the US has dramatically stepped up air strikes in Afghanistan and Afghanistan-East and is sending special operations forces on more and more raids.

Asked & Asked: "Why Aren't More Bankers Going To Jail?" The only visible answer seems to be “Because they're bankers. They have money.” Cue Heavenly Choir.

Unanimity: A University of Maryland survey agreed with previousstudies in finding that Fox News viewers are “significantly more misinformed” than those who get their news elsewhere. From here, for example.

The Health of the State: Continuing clearly unsustainable and eventually disastrous debt monetization in order to extend unemployment benefits, provide food stamps, fund health care for the elderly may be the best way to prepare the nation for the wars to come.

Money Back Guarantee: In 2007 only 9% of MBS were backed by the full faith and credit of the government of the United States through Ginnie Mae. This year 30% of all MBS issued were backed by the US taxpayer through that agency.

Origin of Specie: The pyramid's base – the amount of money available – comes from the surpluses produced from agricultural and extractive enterprises and the division of labor that this surplus provides. This activity – farming, mining, fishing – is what frees others to work in manufacturing and, eventually, service industries. With plenty of surplus, the economy can even support bankers. For a while.

Sic Transit Gloria: The only superpower in the world has spent over $1 trillion in ten years of unending war in Afghanistan and Iraq. Yet no one cares. Not the politicians, not the citizens. There is no outrage at the cost, no outrage at the dead and wounded soldiers, no outrage at the war crimes, torture, dead civilians and ruined societies left in the rubble. We are oblivious to the implications – fiscally, politically, economically and personally. Don’t touch my benefits.

Thursday, December 16, 2010

“The world doesn’t end with a bang or a whimper, but with the endless repetition of lies and disinformation.”Joe, Climate Progress, comments.

The Plan: Congressional Republicans deliberately rejected a renewal of the Build America Bonds program because ending the program will make it harder for states to borrow to cover an expected $140 billion in budget shortfalls in 2011. It is part of their plan to prevent a federal bailout of “spendthrift states”, forcing state governments to seek bankruptcy protection (which they cannot now do) and subsequently cripple public employee unions through pension, wage and employment reductions.

Counter-intuitive: Those of us shivering in Great Britain, Europe and most of the US will find it hard to understand that temperatures in Greenland are 18°F above normal. Hard to talk about the climate in this weather.

Baby Bear's Porridge: The government reports that the battle between inflation and deflation is essentially a tie, with the core CPI inching up 0.1% in November. Earlier the PPI was came in at 0.8% which would suggest that producers are cutting their profit margins and concentrating on short-term profits at the expense of long-term survival. Y/Y inflation is at 1.1% - way below the dreaded hyperinflation and below Bernanke's goals.

Without Comment: “Obama To Nominate A Defender For Whistle-Blowers.” Tell Julian to put down his hand.

Revisionism: The Republicans on the Financial Crisis Inquiry Commission have quit because the majority refused to ban the phrases “Wall Street” “shadow banking system” “interconnection” and “deregulation” from the final report.

If Only: The Irish government has blocked Allied Irish Banks from giving €40 million to bankers for their work in bringing down the Irish banking system and with it the Irish government.

Slide Show: Some claim there are 64 million empty houses scattered throughout China – sort of like Florida without the swampland. “There’s city after city full of empty streets and vast government buildings, some in the most inhospitable locations. It is the modern equivalent of building pyramids.”

Gatsby: The rich are different. Or did Citi give you a $22.5 million 2.357% mortgage too?

Up in Smoke: Industrial production is up 0.4% in November and capacity utilization is at 75.2% - or so the new data say. The big gain was in utilities. Employment was the big loss according to the Empire State Manufacturing survey, indicating businesses are cutting back jobs and hours worked while squeezing even more production out of the remaining serfs.

“V” - The Sequel: Retail sales (minus gasoline) are now higher than they were at the peak in 2007.

Exports: As riots explode in Athens and Rome, British police are considering a ban on anti-Government protests in central London in order to protect the government from being overly aware of the discontent of the rabble. Why don't they just create remote, fenced-in Free Speech Zones like we do in America?

Punishment First, Trial Later: Bradley Manning, who is accused of providing some/most/all of the WikiLeaks cables – but convicted of nothing - has been kept drugged, in solitary confinement, with 23 hour-a-day isolation in a barren cell, for over 7 months. In a couple of years he'll be given a fair trial and sent back to the same cell. Or maybe stood before a firing squad. Whatever.

Half a Loaf: The House has passed legislation that would repeal DADT. Now to get it past the Just Say No bunch in the Senate.

Reminder: “We look forward to a world founded upon four essential human freedoms. The first is freedom of speech and expression… The second is freedom of every person to worship God in his own way… The third is freedom from want… The fourth is freedom from fear…” Franklin Delano Roosevelt. Pray we remember.

Can You Hear Me Now? Just as we were getting used to the idea that governments can't keep secrets from determined hackers, we learn that they can't keep cell phones from people they have locked up in cells, either.

The Dating Game: The US counter-insurgency campaign in Afghanistan to succeed, it needs a stable, well-liked and dependable local partner in Kabul Honesty is not a requirement, but docility is. Karzai, for his part, can't decide whether he wants the Taliban or the Americans to take him to the dance.

Old News: The Vatican Bank “allowed clergy to act as front for Mafia”. Nice to see they don’t discriminate at the collection plate.

It's Different This Time: Banks are offering credit cards to higher risk borrowers again, claiming that this time it is not so risky because they are using new and better guidelines – like customers' Facebook pages and Google searches – to determine creditworthiness... and charging ever higher fees and interest rates.

Wholly Mackerel: Iceland and the Faroe Islands have seriously disturbed both Great Britain and the EU and this time it has nothing to do with banks. Iceland and the Faroes have set their own quotas for the mackerel harvest, far in excess of the numbers desired by GB and the EU. Just like in the bank confrontation of a couple of years ago, threats of retaliatory actions are expected.

Candide: Wall Street, the politicians, and the MSM keep claiming that everything is getting better, every day, in every way. Except. “Saving” turns out to be lower debt due to write-offs. Improving employment data turns out to be more and more people leaving the labor pool. The “upturn” is an economy where 7 million fewer people worked than a couple of years ago. And with fewer people working shorter hours at lower wages somehow retail sales are up. Repeat after me: “The economy is recovering, retail is doing well...

Size Matters: A few days ago Glenn Beck claimed that ten percent of Muslims are terrorists. There are about 1.5 billion Muslims in the world. General Petraeus needs reinforcements if he's going to take on 150 million terrorists and Ahmed Karzai at the same time.

Tuesday, December 14, 2010

“Washington and the regulators are there to serve the banks."Representative Spencer Bachus (R-AL)

Winners & Losers: The Republicans are delighted that a (conservative, low-level Virginia) judge has ruled that the individual mandate portion of the Healthcare Reform law is unconstitutional. Insurance companiesare not amused – it's the only part of the reform they liked.

Agenda: The principal accomplishment of international climate conferences is the selection of the location of the next one. It is becoming exceedingly obvious that we are not going to make progress on this issue until Big Oil, Big Coal and Goldman Sachs figure out how to make a profit from it.

Must Be Doing Something Right: Obama is calling up the neighbors and complaining about WikiLeaks going around telling the truth on everybody. We are waiting for Assenge to be burned at the stake, like Servetus.

Dumb & Dumber: Crude oil is like an elevated highway, the denier explained. When it collapses we'll just find another way around... Wonder how long the detour'll take.

Deleveraging for Dummies: Leverage – to the economists – means credit. Credit is another way of saying debt. Deleveraging is the process of paying off the debt your use of credit piled up. If you've been living on the never-never for 30 years it takes more than two extra payments on the Visa bill to settle things. It means paying those extra payments and not running up any more debt for years, decades. It means stopping all that damned consumerism that got us here. We're not going back to normal – whatever that once was – for a very long time.

Mary, Mary, Quite Contrary: As I recall, Ben Bernanke said that QE2 was going to lower long term interest rates. The bond markets didn't get the memo.

Up, Up, and Away: For the 26th consecutive month, the US spent more than it took in. The 2011 deficit will be about $1.5 trillion (plus whatever amount we give the rich), topping last year's $1.3 trillion and 2009's $1.46 trillion.

Big Boys Don't Cry: The rumored upturn in the economy is leading to more discrimination in the workplace – November unemployment for men was 10.6% and for women 8.9%. This reflects the long term trend in US employment as jobs traditionally done by men are abolished or sent overseas and the lower paying jobs more heavily populated by women show growth, especially in nursing and related health care services.

Golden Years: Over 1.6 million older Americans are putting off retiring, finding that continuing to work and continuing to eat are closely related after Wall Street ran off with their savings and pensions.

Headliners: Wall Street Sees Record Revenue in '09-10 Recovery From Government Bailout, asStocksRally With Bernanke Bond Buying, Data Shows QE Buoying the S&P 500 and Real YieldsShow Dollar Can Still Outperform With Bernanke Printing Money. How are things in your neighborhood?

Shut Up and Go Away: A California state judge has ruled that the ratings given by Fitch, Moody's and S&P are protected free speech and they are immune from being sued for their ratings no matter how “wildly inaccurate” they are. Just because their ratings lead to billions in losses does not mean they can be sued – for fear of quelling speech about public issues. The Judge ruled that the ratings firms were “potentially the good guys.” Potentially.

Monday, December 13, 2010

Pay to Play: All this WikiLeaks freedom is a bit of a sham. Any government can, at any moment, pretty much completely control what is on the Internet. The net is not free, nor democratic. If you doubt that, ask the next Chinese visitor you come across. Or American teen who understands how the Internet works. Makes you wonder about the little morality play that's going on, doesn't it.

Is There An Echo In Here? Reprising Barbara Bush at the Astrodome, Sarah Palin found Haitian refugee camps to be “full of joy!”

Clear and Present Danger: There were 13 bankers who ruined the economy. Or was it Alan Greenspan? Or Goldman Sachs. Or, wait, it was derivatives, or the poor folks who took out sub-prime mortgages. Or was it the middle class that used their homes like ATMs? Or maybe it was the voters who wanted more for less, more for less. Got a mirror at your house?

Gather 'round the Campfire: Despite what's going on outside my window, the 2010 meteorological year has turned out to be the warmest on record.

Pride: A survey of 25-34 year-olds in the developed world revealed that in ten countries had higher percentages that had completed high school. The US was the only OECD country where the 25-34 year-olds were not better educated than their parents' generation.

Scrooge: Under the December Compromise, Obama is letting the rich give $5 million gifts with no tax and to pass on $5 million in their estate with no tax and pay just 35% on the loot beyond what they can legally give away and otherwise hide. And for the 35 million service employees in bars, restaurants, retail, dog groomers and such who make under $20,000 a year, Obama has a nice little $400 gift – spread over the entire year. Eight bucks a week. Two lattés.

Don't Ask, Don't Tell: The US State Department says that having “political objectives” disqualifies one from being considered a journalist. Don't tell Rush or Mr. Beck.

Golden Rule: If you are continually surprised at the government's bias towards the rich, remember that more than anywhere else, money matters in politics. People on food stamps and unemployment checks cannot match the contributions the rich make to politicians. Unions used to help even the playing field, which explains why business and their Republican hired hands have been dismantling them for 30 years.

Father Forgave Them: Cables show that Ireland gave in to pressure from the Vatican to grant immunity to priests and other church officials after decades of sexually abusing Irish children. Now they’re letting the IMF do it.

The Future of Government: During the last 200 years we have built a very complex, highly interconnected, just-in-time civilization based on abundant cheap energy, without which our economies cannot function. Too bad we've allowed the skills our ancestors had slip away - once the cheap energy fades away it might be handy to know how to yoke up an ox.

Crib Notes: “When anyone starts lecturing you that the US has the highest tax rate in the industrialized world, just turn around, walk away... [he] is either ignorant about this country’s taxation system, or is deliberately trying to mislead you.”

Dogs/Fleas/Lying: In 2008 Hajji Juma Khan captured and brought to NY to face justice under the narco-terrorism law. Well, in that Juma Khan was a longtime informer for the DEA and CIA source, captured might not be the right word. And justice is sometimes a conditional thing.

Once Upon A Time In America: The American Way used to be that the owners built firms where the rest of us worked, wages were enough that the workers could buy the stuff they built, providing profits for the rich. Everyone paid taxes, which the government used to build, maintain and improve the physical and social infrastructure of the nation. That permitted the workers to become more skilled and the owners to make more profit. No longer. Now the rich sit in their gated communities wondering why the poor don't pay more in tribute.

Saturday, December 11, 2010

Fun with Numbers: Various political blocks are giving a variety of conflicting estimates of the cost of the December Compromise. They are at best guesses and at worst contrived figures to make a political point. Truth is no one really knows, although most of us suspect it will end up costing far more than anyone claims and do far less good than anyone hopes.

Witching Hour Price : Some see oil at $90 a barrel as about as high as oil can go without dooming an economic recovery. Higher oil prices diffuse throughout the American economy because little if anything is immune from either direct or indirect oil price increases. $90 a barrel oil may not doom the rumored recoveryall by itself, but it most certainly is another brick in the wall.

Ransom: Halliburton is negotiating with Nigeria to keep its former CEO & former US vice-president (emphasis on the vice) out of jail. The price is said to be half a billion dollars. Sorry, I gave at the office.

The Lesson: “The more that countries reduce wages and costs, the heavier their inherited debt loads become. And, as debt burdens become heavier, public spending must be cut further and taxes increased to service the government’s debt and that of its wards, like the banks. This, in turn, creates the need for more internal devaluation, further heightening the debt burden, and so on, in a vicious spiral downward into depression.”

Cashing Out: Corporate America is sitting on the largest cash hoard it has had in 50 years, because they can see no profit in building more plants or hiring more workers or making more widgets. If a company cannot justify investing its own money back into its own operation, why should I buy stock in it?

Everything You Know is Wrong : Last month US exports increased, imports decreased – except for consumer goods. The cheaper dollar (down 6.6% against a trade-weighted basket of currencies) helped the exports, hurt the imports.

A World Built By Hand: Missed in all the statistics about the fall of the housing industry is the effect it is having on those who actually build the houses. No, not the big developers, but the carpenters, sheetrock hangers, electricians and the other laborers. A typical housing laborer used to make $150 a day or more. Today $60 is a good day's pay. Wonder how that affects quality...

Beggars:One of the lessons a traveler learns from visiting places like Kolkata or Mumbai or Lagos is the art of not seeing the beggars. They are everywhere and no matter how rich you might be, you cannot save them all. So, too, with the seriously sick. Society may want to save everyone, but no society has the resources to do so. Somebody's child, somebody's mother will die for lack of a treatment that is only available to all in a magic land beyond the rainbow. Here and now we must find a way to reasonably and equitably let some die so that others, many, many others may live. Yes, stopping our permanent state of war and war profiteering would help, as would single payer healthcare and a rational tax system, but even with all that, decisions would have to be made. Today they are made by price tags. Got a better solution?

Confusion Reigns: A jumble of oil-related reports plopped down bringing mixed messages. The IEA raised its crude oil demand projection for next year by 260,000 but gave no hint where the oil might come from. OPEC's secretary-general said its members output would dip in 2011 and that if oil went to $100 it would “indicate something is wrong with fundamentals”, but maintained that oil supplies were adequate. Interesting word, adequate.

Leaps & Bonds: California, which just took some draconian steps to narrow its $26 billion budget deficit, was handed another $2.1 billion in deficit spending thanks to Obama's December Compromise. Add to that whatever amount the failure to extend Build America Bonds will drive up the cost of issuing new debt and life just gets harder and harder for the Californians.

Friday, December 10, 2010

Economics is about distributing limited resources among unlimited wants.

All the Marbles: The struggle between the ECB/IMF and the financial crowd is about not just the future of the euro (if any), but the future of the EU and the ECM. If Ireland, Greece, or Portugal defaults, where does the damage stop? When do the riots end? When do the wars commence?

Angel Tree: Next time you pass the kettle, remember that Obama and the GOP are wrapping up bundles of $100 bills for the nation's billionaires while one in seven Americans is trying to stretch his food stamps to the end of the month.

In the Old Country: Ireland is massively in debt to the IMF/EU because it (stupidly) bailed out its banks. Now AIB, one of the bailed out banks, is paying the people who ruined both the bank and the country €40m in bonuses because – you've heard this before – if they don't the clever boys and girls who sank an entire country will go to work elsewhere. Where?

Coal in their Stockings: Millions of private sector workers in the UK are losing up to 25% of their retirement income as part of the government's program to save the investors. They had been expecting a 4.5% hike in their pensions.

Split Second: A 0.07-second power disruption at a Toshiba chipmaking factory forced some operations to halt, which may cut shipments to Apple and others by 20% over the next couple of months. The factory's backup generators were not built to handle this particular problem. What part of “backup” doesn’t translate?

A Christmas Story: Officially there are over 15 million people in the US and another 9 million are “part time for economic reasons”. The real numbers are anyone's guess. Over 6 million have not had a job in over 6 months. Soon over 2 million will lose their unemployment benefits, having been idled for over 99 weeks. Nearly all recent "job growth" has come from the part-time economy – jobs that average $20,000 a year. For Christmas, and every month thereafter for the next six years the economy needs to create 235,120 new full-time jobs a month to get the unemployment rate down to pre-recession levels.

Questions: Is economic growth economic? Does incremental increase in GDP cost more than the increase gained? Is the cost worth the benefit in human terms? Does GDP growth measure anything worth measuring? Are we facing a the dual collapse of petroleum based civilization and our growth based economy? Answers? Answers cost extra.

Insulation: Ted Turner, having the luxury of not being elected to anything, is urging everyone, everywhere to have but one child. At most. The world population has passed 7 billion on its way to 10 billion by 2050, and Ted doesn't think this is a good idea.

Thursday, December 9, 2010

Proverb: Two wrongs do not make a right. If raising taxes is wrong and increasing the budget is wrong, then most assuredly the December Compromise is wrong.

Size of the Whole: The IMF/EU bailout will cost every Irish worker 20 euro a week. Those without a job will see their unemployment checks cut by 6 euros. Ireland's austerity budget calls for about 50 billion euros, it has to pay the IMF/EU another 45 billion euros, and its income is only 31 billion euros. And everyone is overjoyed that a crisis has been kicked down the road averted.

Goal! Obama has brought bipartisanship to Washington; both Republicans and Democrats are going to filibuster his December Compromise.

No Shame: While various politicians want to drag Julian Assange into court – or maybe straight to Guantanamo – for letting the public know what their betters have been up to, the US State Dept. has announced it will host next year's “World Press Freedom Day”, at a secure location yet to be determined.

Buy Partisanship: The December Compromise, designed to lower taxes for the rich and give subsistence money to the unemployed, will renew the government's subsidy for ethanol and renew the $1-a-gallon subsidy for biodiesel that expired in 2009 – retroactively. Hard to hear the deficit shrinking for all the cries of Gimmie, Gimmie, Gimmie.

Now It Can Be Told: The American Family Association has revealed that WikiLeaks is a gay conspiracy which proves that gays shouldn't be allowed to serve in the military.

Cramming: Consumer credit surged higher in October at the fastest monthly rate in two years. The $3.4 billion annualized increase had nothing to do with credit card use and everything to do with students taking out more loans they will never repay and the the auto industry lowering its credit standards in order to move more cars that will eventually be repossessed. Ah, growth.

Getting to the Point: Lots of commentators are pointing out that the December Compromise does not include a renewal of the Build America Bonds program. Of course not. While Obama is bragging about how 20 years from now something, something... the GOP will bankrupt the states, break the unions, force the states to terminate pensions and sell off the roads, bridges and furniture to their friends.

Civics Lesson: Rep John Cook of the Texas State Republican Executive Committee wants to get rid of Joe Straus – the current Texas House Speaker – because Rep. Straus is Jewish and “we want a true Christian conservative” as Speaker.

The View: RealyTrac sees the US housing debacle lasting at least three more years, with rising mortgage rates, increasing foreclosures and ever more distressed houses on the market weighing down the economy until 2014. About a million houses were seized by banks in 2010, a record that will last only until next year.

Ups 'n Downs: UPS is installing metal detectors at the entrances to its retail outlets, along with x-ray scanners for your unwrapped items. No prepackaging, please. Two forms of identification – with front and profile photographs - of both the shipper and the intended recipient will also be required. There will be a slight increase in shipping fees to cover the cost of verifying that you are not on Homeland Security's Do Not Ship list. Merry Christmas.

Psst! Pass It On: Under the headline “North America: The new energy kingdom” The Globe and Mail quoted the American Petroleum Institute as reporting that the US produced more crude oil in October 2010 than ever before. The Globe was only repeating an earlier errant report in the Oil & Gas Journal article. The problem is that API never made such a silly claim. Actually, factually, October 2010's production was 5,567,000 bpd and the all time high was October 1970 at 10,013,000- some 40 years ago.

Our Motto

Keep fightin' for freedom and justice, beloveds, but don't you forget to have fun doin' it. Lord, let your laughter ring forth. Be outrageous, ridicule the fraidy-cats, rejoice in all the oddities that freedom can produce. And when you get through kickin' ass and celebratin' the sheer joy of a good fight, be sure to tell those who come after how much fun it was.